Corporation to Oversee New Hudson Rail Tunnel, With U.S. and Amtrak Financing Half

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Inside the deteriorating, century-old Amtrak tunnel under the Hudson River. Federal officials have called building a new tunnel one of the country’s most important infrastructure projects.CreditFred R. Conrad for The New York Times

Federal and state officials announced an agreement on Wednesday to create a corporation within the Port Authority of New York and New Jersey to oversee long-awaited plans to build a new rail tunnel under the Hudson River.

The entity, called the Gateway Development Corporation, will coordinate the project and assemble the billions of dollars needed to pay for it. It will be controlled by a four-member board with representatives from New York, New Jersey, Amtrak and the federal Transportation Department.

As part of the agreement, the federal government and Amtrak said they would be responsible for financing half of the project, which could cost as much as $20 billion. Govs. Chris Christie of New Jersey, a Republican, and Andrew M. Cuomo of New York, a Democrat, had pushed for the cost-splitting and said the two states would line up the money for the other half.

The announcement, from the governors and Senators Chuck Schumer of New York and Cory A. Booker of New Jersey, both Democrats, signaled the most significant progress yet on an effort federal officials have called one of the most important infrastructure proposals in the country. The century-old rail tunnel used by Amtrak and New Jersey Transit that runs under the river is deteriorating and needs repairs because of damage by Hurricane Sandy.

In August, Mr. Schumer proposed creating a development corporation to manage the project, which is part of an Amtrak proposal known as the Gateway program. Mr. Christie and Mr. Cuomo said the entity should be housed within the Port Authority, an agency run by the two states.

Mr. Schumer hailed the agreement on Wednesday and said the project could now move forward, but noted that plenty of work still had to be completed to secure federal financing.

“It’s the first inning of a long game,” he said, “but it’s a big change that has the federal and state players on the field on the same team, instead of in opposing dugouts.”

The federal transportation secretary, Anthony Foxx, and the two governors had quarreled over the project in recent months. After extensive rail delays over the summer, Mr. Christie, who is running for president, was criticized over his decision in 2010 to cancel an earlier tunnel project.

On Wednesday, Mr. Cuomo said that the federal financing commitment was important and that the tunnel was desperately needed.

“They’re meeting us halfway, and that’s good enough,” he said.

The federal share of the costs could come from a mix of grants, Amtrak revenue and federal loans that Amtrak or other federal partners would have to pay for, officials said. The states’ share could also be paid for in part by federal loans that the states or the Port Authority would finance.

The Port Authority, which has recently faced a series of scandals, already has several expensive priorities: replacing the Port Authority Bus Terminal, improving La Guardia Airport and extending the PATH commuter train to Newark Liberty International Airport.

Under the agreement, the Port Authority and Amtrak will provide staff for the corporation, and the authority will arrange for office space and logistical support. The corporation will own the new tunnel and enter into operating agreements with railroads to use it.

Mr. Foxx said the governing structure would help advance the project quickly. “When I sounded the alarm this summer, my goal was to get the necessary parties to the table,” he said. “Now, that table is set.”

A version of this article appears in print on , on Page A29 of the New York edition with the headline: Development Corporation Will Oversee Hudson Rail Tunnel Project, Officials Say. Order Reprints | Today’s Paper | Subscribe